Under a dual operating system, all processes and activities that involve what a company already knows how to do stay on the regular, hierarchical side of the company. High-stakes initiatives that involve change, speed, innovation or agility, go to the new agile network.

Reviewer Kim Girard continues, emphasizing that Kotter is not looking to abandon the traditional hierarchical model, but enhance it:

A dual operating system is a nod to what Kotter believes is some of the most interesting management thinking of the past few decades, from Michael Porter’s “wakeup call telling us that organizations need to pay attention to strategy much more explicitly and frequently,” to Clayton Christensen’s insights about how poorly companies handle the technological discontinuities inherent in a faster moving world. Kotter also credits recent work by Nobel Laureate Daniel Kahneman, who describes the brain as two coordinated systems, one more emotional, the other more rational.

In a typical organization—from the federal government to a pharmaceutical giant—a hierarchical operational structure meets daily demands through clear reporting relationships and responsibilities, Kotter writes. This structure minimizes risk, keeping people in boxes and silos, sorting work into departments, product divisions, and regions. Trouble is, managers in hierarchical organizations don’t promote or reward risk and innovation—they rely on routine, and turn to the same trusted people to run key initiatives.

Girard goes on to discuss Kotter’s 5 key principles for the dual operating systems, which ensure that the system works as envisioned (an “enhanced heirarcy” that focuses on leadership and innovation) and 8 accelerators that help managment tackle big opportunities for change. The accelerators are strikingly familiar, as many seem to have been adapted from Charles Duhigg’s The Power of Habit. Overall, an interesting approach to organizational design.

2 responses to “John Kotter on organizational design”

It is worth noting that Dr. Kotter’s 8 Accelerators first appeared in his book Leading Change in 1996. Charles Duhigg attended HBS shortly after Dr. Kotter retired to an emeritus position, so it would appear that Mr. Duhigg was actually influenced heavily by Kotter.